Nothing makes sense anymore. We should just face up to that one undeniable fact this year and accept that down is up, up is down and black is white. Buckle up, enjoy the ride and take each day at a time because, ultimately, whilst a year is just an arbitrary measure of time invented to bring order to our lives this is surely the longest year ever experienced by humanity.
Whilst jobs have been threatened, three quarters of the world’s economy has been forcibly ground to a halt and our lives have changed almost completely in little over 6 months it’s actually quite reassuring in some ways that the UK property market continues to perform like an economic juggernaut with little to no regard for logic or precedent.
Okay, there is quite a good line of logic for the success we’re witnessing, but only in retrospect can we come to that conclusion. All the other economic rules that govern the rise and fall of price, supply and demand seem not to apply in this instance.
There is a single truth, however, that unlike stocks and shares or other investment instruments, people will always need property and housing. There is a truth that regardless of the circumstances or context there will always be a consistent supply of customers requiring housing, and whilst there exists a distinct and growing disparity between that demand and the supply of housing, it will always create upward pressure on prices.
Still, though, it still creates more than a little confusion given the current circumstances around the world.
New Records
You’ll be happy to know, on that note, that house prices are up a whopping 5% year-on-year compared to prices in September 2019 according to the Nationwide.
As reported by the BBC, ‘The Nationwide said that UK house prices rose by 0.9% in September compared with August. In the three months from July to the end of September, UK prices were up 1.7% compared with the previous quarter and the average home cost £226,129.’
‘The annual rate of growth is the highest for four years, according to figures based on the Nationwide’s lending data.’
This, a full 5 months after lockdown restrictions were removed, indicates a much broader and longevous trend than was initially assumed earlier in the year when many put it down to pent up demand and a backlog of activity.
That appears to have been debunked rather comprehensively by these new figures, with consumers, buyers and sellers all looking to enter the market in record numbers.
Of course, there will be a number of explanations for this activity such as people looking to upgrade their housing situation after spending a solid 12 weeks shut away from the world and a danger of a return to those restrictions, as well as pent up demand coming through which has translated into increased activity.
All being considered, however, now seems precisely the time to expand into the housing market as a landlord to make the most of these historically low interest rates and huge demand, both of which will translate into rental growth and increasing yields.
As the year slowly lurches towards a conclusion in December, who knows what could be around the corner?
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